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WorksheetsModule 6 Quiz Review
Total questions: 15
Worksheet time: 5mins
Your financial adviser has suggested that you not put all of your eggs in one basket and that you diversify your portfolio. He/she is most likely suggesting:
You buy a lot of stocks
You buy a lot of bonds
You invest in a mutual fund
You become a "slum lord"
A person will earn more on an investment if interest is compounded _____.
monthly
daily
weekly
annually
A stockbroker works for which type of financial institution?
Savings and Loan Association
Brokerage Firm
Credit Union
Commercial Bank
When a person buys a company’s bond, he _____.
owns part of the company
has lent money to the company
is liable for the company's debts
can vote as a shareholder
Which of these strategies is NOT a wise investment practice?
Invest quickly and often
Define goals
Keep good records
Seek good advice
Money left over after you have paid bills is ______________________.
Discretionary income
Principal
Interest
Compound Interest
A person wants to invest in a low-risk investment product. Which of the following would be the best investment for her?
Common Stock
U.S. Treasury Bond
Mutual Fund
Speculative Stock
A person wants to invest in a medium-risk investment product. Which of the following would be the best investment for her?
Common Stock
Savings Bond
U.S. Treasury Security
Futures
Interest computed on the original principal PLUS accumulated interest is _______________.
Compound Interest
Computed Interest
Calculated Yield
Compounded Yield
A 25 year old invests $5,000 in a long term investment. A 50 year old invests $10,000 in a short term investment. Which of the following is true?
The 50 year old will become far more rich
Neither will become very wealthy
The 50 year old will be better off financially because they invested more money
The 25 year old will benefit from the fact that their investment will grow over a long period of time
Why does a bank pay interest to a depositor?
The bank is able to use deposits to earn profits
It is a requirement of the FDIC
It helps the bank invest in the local community
It is a benefit of having a bank credit card
Which of the following is a simplified investing concept that determines how long an investment will take to double?
The Stages of Investing
The Rule of 72
Simple Interest
A 529 Plan
Which of the following investments is considered high risk/high return?
Savings Account
Common Stocks
Certificate of Deposit (CD)
Futures
Use the Rule of 72 to determine how long it will take this investment to double: $2,000 in an account that pays 4% will increase to $4,000 in about ______ years.
9
12
18
36
Which Stage of Investing is considered "the most risky"?
Beginning Investing
Systematic Investing
Strategic Investing
Speculative Investing
